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Your business becomes a living concept the moment you start developing it from an abstract idea. As with all living things it has a business lifecycle, and it must be nurtured and catered for depending on which stage the business is in. Over the last few months, we’ve shared tactics and strategies that you can incorporate within each stage. If you’d like to start at the beginning of this series, click here.

At each stage of the development, it’s important to focus on the key aspects that your business requires to evolve at that particular moment. Your focus and priorities will change as your business grows; knowing when and how to make these changes is the key to the successful development of your business and long-term sustainable growth.

The Importance of the 5 stages of Growth

The stages of growth for any business can be broken down into 5 basic categories: Existence,Survival, Success, Take-off, andResource Maturity.Each individual growth stage requires a different set of applied skills and resources. It’s important that you recognize the current stage of your business lifecycle so that you can better evaluate the resources required to nourish your business’ development and plan accordingly through each progressive stage.

7 Steps to Plan Your Business Lifecycle

1. Understand which stage you are currently in

Existing businesses often fail to accurately determine which stage of the lifecycle they are in. Referring to the previous articles in this series on the 5 stages of growth, you should be able to recognize which stage your business is at regardless of its age. Just because an established business has experienced growth does not necessarily mean that it has put in place an effective means to expand and cope with increased demand. Many businesses plateau at every stage because they believe they are operating at maximum capacity and don’t push through change or level up their game.

2. Learn the risk factors and key management activities in each stage

It’s important to acknowledge that you will be under prepared for different tasks at each stage of your businesses lifecycle. By planning management activities and resources in advance, you’ll reduce the effect of these risks to your business.

Identify the expertise needed to perform each project and the resources needed to deal comfortably with demand. Then start planning.

3. Plan to mitigate or overcome the risks associated with each stage

Risk management should be carried out ahead of new tasks or projects. Risks should be monitored and evaluated on an ongoing basis. Risk responses are varied and can include:

Avoidance—eradicates a specific threat, usually by stamping out the cause.

Mitigation—condensing the anticipated monetary value of a risk by reducing the probability of occurrence.

Acceptance—accepting the ramification of the risk. Usually with the provision of a well-drafted contingency plan ready to launch should the risk become unavoidable.

For every risk you encounter, you should conscientiously choose one of these responses.

4. Ensure you have adequate human, financial and technical resources

A business can’t evolve to its full potential without the provision of accessible resources. All of which, ultimately require funding. The objective is to estimate demand with as much accuracy as possible. Often times, it’s better to have demand slightly ahead of resources. But, you won’t be able to sustain that rate for long.

5. Build the right team

It is important to build a team that can do the work efficiently and without too much direction. Hire strategic thinkers and capable leaders. But don’t hire too many cooks. It’s better to have one main chef and servers rather than have many chefs and no one serving the food.

6. Manage but don’t micromanage

Once you have the right team, let go. Delegate the work to them and be available when your leaders need direction and coaching.

Your time is far better used assessing the results and the productivity of the team and guiding them towards the goal. By not getting too involved, you can recognize potential risks before they are problems. Observe from afar and let those who are capable get the work done.

7. Evaluate results

Good planning is based on accurate data and previous experiences. Regularly review plans and forecasts and evaluate the results continuously. This data will offer a strong indication of your ability to plan and predict the outcome.

Continuous Development

The planning for your business lifecycle should beanon-going process. Identifying new risks, overcoming them, and comparing the results against the plan are essential in refining your ability to prepare for the next stage of your business life cycle.

Having an Innovation plan when you move into the Resource Maturity stage is critical. Any resource maturity plan will help define your resource management strategy, analyze the core elements of operational stages, and highlight the actions that need to be prioritized. However, specifically addressing innovation will be the key to your sustainability as an organization.

Effective resource maturity plans are not white paper commodities. The concept is not rigid, and the product is not purely academic. Strategic planning is required to advance any organization, regardless of its size. To do so, you’ll need to develop a dynamic system that allows for quick innovation.

What is the Resource Maturity Stage?

Identifying your business’ relativity to the resource maturity stage is the first step. The fastest way to start is to recognize the 5 crucial stages of development: Existence, survival, success, take-off, and resource maturity, and assess where you are in your business. Too many businesses overlook the latter stage or fail to implement an effective strategy to grow beyond the first few stages. This results in an inability to expand effectively and innovatewhich leads to the business becoming stagnant and losing market value.

Key Elements of the Resource Maturity Stage

At the resource maturity stage, your business faces several potential challenges:

Adaptingto rapid expansion

Anticipating and accounting for progress limitations

Acknowledging responsibilities to clients and shareholders

Allocating resources to work, in line with these fundamentals

If your business is at this stage, it’s likely that you have good controls in place to address most of the challenges. At this point, you’ll want to review which of these needs improvement or can provide economies of scale. When you do this, you’ll end up with systems that are efficient and productive, and you’ll continue to mature organically.

The Importance of Innovation for Growth

A company or business irrespective of size can’t expect to develop, remain profitable or hold market share if it is not constantly innovating and improving. Competitors of every business in the world are watching to see what has been successful, what is trending and what is yet to be done. They learn from examining your products and services and can sometimes employ strategies with a significantly reduced investment.

If you don’t constantly analyze your processes, workforce, products and services, you’ll lose your market share and potentially your business. Innovation is imperative for growth, for development, and for business in general.

Ultimately, a successful business is built on strong planning, analysis, comprehension, and execution. As the business evolves so must its ability to refine its role and clarify its objectives. Market trends, economic changes, and development potential are all fluctuating elements in an operational business life-cycle. Innovation and proper resource allocation is key to the successof any business enterprise.

If you’ve reached the Resource Maturity Stage within your business and need assistance with improving your financial systems so that you can focus on innovation, give me a call. I’d be happy to help.

In the last four blog posts, we’ve taken a deep dive into the stages of small business growth. You can begin reading this series here. Small businesses have five main stages of growth. The first one, the existence stage, revolves around the creation or the birth of the business. The second stage focuses on survival. During this stage, little to no profits are made, the business focuses more on staying alive and not counting too many losses when it comes to its resources. The third stage involves profit for the first time and the decision to expand or maintain the status quo. But, the fourth stage, called the Take Off stage is all about developing the business even further.

What is the Take Off Stage?

Your business has grown considerably, has achieved a sustainable amount of financial resources and attracted key managerial talent. Your primary concerns at this stage are not only to accelerate growth, but also to learn how to generate enough revenue to support that growth.

Is your business ready to take off? There are certain factors that can determine the answer to this question, most of which are discussed below. However, the key factor is your ability to manage both the people side of growth as well as the financial aspect of it. In some cases, you may be replaced by your board as a seasoned expert takes over to grow the business further.

Staff

Your staff work with your customers every single day and are the perfect candidates for giving input to the growth of your business. Without their input, you may deploy the wrong strategy or launch a product or service that your customers don’t want. Depending on how many resources have been used, the consequences could send your business back a few stages. It’s not only important to employ the right staff, but listening to their feedback is a crucial factor for the development of the business.

Cash Flow

Business becomes more complex in the Take Off stage. While you have competent staff, your systems are beginning to become strained by your growth so you bring on a Chief Technology Officer or systems project manager to refine them.

Maintaining the cash flow is important. However, what is more, important is using the cash in a way that moves the business forward. You’ll need to have a higher debt to equity ratio, and your tolerance for that is what drives forward progress or stalls it.

As you make decisions, you’ll consult with experts and put the right strategies in place with a cash flow plan to support them. Throwing all cash resources into one all in strategy could potentially harm the business more than help it grow, so you’ll manage your new product lines and services accordingly.

Continuous Improvement

Keeping a positive attitude is another important factor in helping the business grow. It’s important to remember that everybody makes mistakes and that managers don’t have a way of seeing the future to determine which strategies will work and which won’t. Accepting others’ mistakes is something every owner should do to help create a great working environment where everybody can thrive.

To help your business grow and develop from the third stage to the fourth one, you need to make sure that:

You have experienced staff that you trust and who can come up with great strategies for your business to grow based on what your customers want;

You know how to use the cash resources coming in and not using them on one single strategy that promises to boost your business further; and

You know and accept that everybody makes mistakes, but at the same time, you expect the very best from the staff.

The Take Off stage often involves more self-discovery. How much risk are you willing to take? Are you the right leader? Can you handle higher levels of debt? With confidence and continuous learning, you’ll be ready when your company is. I’m here to help. Contact me today.

Small businesses have always had it rough, mostly because it takes a lot of time, resources, and effort to build a successful one. As a small business grows, investors come into the mix and the influx of cash can rapidly propel the business into the next stage. However, some small businesses decide that they don’t want to grow. Instead, they want to maintain the status quo. Herein lies the decision to move into the Success Stage of small business.

What is the Success Stage?

The third stage in the five stages of small business growth is called the Success stage. When your business is at this stage, you’ve accomplished huge goals and stabilized cash flow. You’re less involved in the daily operations and take a more strategic role. You’ll begin to make solid plans for the future of your business, your role moving forward, and you’ll make the decision to either use your business as a means of support or as a base for further growth.

Going All-In on Success

If you decide to maintain the status quo, your goal is to get the right people in place so that you can free your time up for your next adventure or phase of life. The first steps revolve around hiring the right people for the right positions. A team of forward thinking managers will put the right financial, marketing and production systems in place. The staff hired for these positions are usually a controller and a production scheduler or operations manager.

The planning of operational budgets will support a functional delegation and overall, everybody involved in the business, including the owner and the manager, should focus on devising a strategy for the purpose of maintaining the current situation. That doesn’t mean that you don’t keep up with technology and improve efficiencies. It just means that you’re not putting much effort into research and development.

If on the other hand you’ve chosen to expand, you’ll play a significant role, but mostly on the planning and new product launch side. While the team of managers are focusing on the strategies that will maintain the day-to-day operations and keep the business profitable, you’ll be off with another team working on the next phase. You can use the cash and borrowing power of your successful business to invest in new product lines.

Moving into the Take Off Stage

As you go beyond the Success stage of small business growth, you’ll need to generate enough revenue to handle that growth. In the next article, I’ll help you navigate the Take Off stage of small business growth. If you’re anxious to get started today, contact me here.

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Existence is the first step towards operation, and gradually, success. In the early startup phase of your business, it’s up to you to manage and consider every single aspect of operations. This is the period where you need to work the hardest and be the most creative to attract customers and provide the best product or service that you’re capable of.

What is the Existence Stage?

The existence stage is the very beginning of any business. The biggest challenge in this stage is generating demand for your product or service. This is a period of first-hand learning and experiences, where you’ll tackle problems like product and service viability and cash flow.

In this stage, you as the owner perform most of the tasks. Your goal for the business is existence and function. Often, you’ll use your own money or a small business loan to help stay afloat.

Some of the questions to consider as you validate your business’s existence include:

Who are your customers and what do they want?

Who are your competitors and what are they doing?

What do you want to achieve and what is your plan?

Surpassing Existence

The key to surpassing existence and becoming a viable business requires that you focus on your core and provide value all while managing everyday aspects of day-to-day operations. To do so, consider these six areas of focus.

Focus on Your Core Business

Always remain true to your business purpose, values and mission. This helps drive your business in the straight direction towards achieving your goals rather than getting mixed up in other schemes and ventures that aren’t in alignment. If you remain steadfast and concentrate your energies on your core business, success will follow.

Define a Market Niche

Your product or service must attract and appeal to your target market in order to generate demand. Uniqueness and distinction will set you apart in the industry, and will attract the customers you’re looking for.

Articulate your Competitive Advantage

Before you are ready to plan all your marketing and pricing strategies, it is essential to examine what techniques and promotions are being deployed by the competition. This will help you stay competitive and maintain an edge in the market.

Your aim is to be unique, and counter your competitors with a greater, more attractive value proposition. Your customers need to know why they should pick you over the countless other businesses who provide similar services or products.

Manage Cash Flow

Liquidity and solvency are the biggest problems during the earliest stage of business. Be sure to manage your cash flow, avoid waste, and keep a check on each and every dollar that is spent. If you are bad at managing finances, hire a professional accountant to do it for you.

Acquire Customers

Acquiring customers is always cited as the most challenging aspect of running a business at every stage of small business growth. The key to acquiring customers is creativity, effective promotion and value. When you provide value to customers, they want to reciprocate in the form of a purchase or referral.

Deliver Value

Provide your customers superior quality, value-added services and products, so that they keep coming back for more, and refer you to their friends. Being a resource and solving customer’s problems are the best thing you can do to grow your business.

As you begin the journey of starting up your business, you’ll need people that can come along side of you. Our Bridge Starter package can help set your business on the right path at the very beginning. Contact us to learn more.

Once you have established your business, defined your market niche and generated a steady demand, your business has landed in the survival stage. Now, your business is a successful and efficient entity that earns revenue and hopefully profit.

What is the Survival Stage?

The survival stage is the second stage in the growth of a small business. Here, your business has started to generate profit, and your biggest challenge is to make sure these profits keep coming in and are utilized efficiently. You do not only need to attract and entice your customers with effective marketing and promotions, but you also need to examine and analyze your ROI and engage in serious strategic planning.

Being open for business is no longer the primary concern. Now you have more important challenges to overcome, such as developing procedures, systems and plans to make sure your profits keep pouring in.

As you grow beyond survival stage, consider these three questions:

Are you ready to delegate minor activities and organize operational systems?

How can you improve internal and external communications?

What does your business need to improve and expand on?

The Key to Growing Beyond the Survival Stage

There are five keys to growing beyond survival, and your ability to master them will ensure your business thrives.

Focus on Expansion

You cannot expand unless you delegate everyday tasks to your employees, and concentrate your energies on more strategic matters. You need to be willing, emotionally and mentally, to let go of these tasks and trust others to take care of them by defining job requirements and tasks.

Expansion should not only be your goal and target, but your policies, strategies and plans should also adequately address all the needs of expansion. As you expand, you’ll have to hire employees and learn employment law and best HR practices. You’ll also increase your inventory and offerings, so you’ll need efficient processes and procedures to ensure that all tasks are completed on time and as promised.

Acquire Necessary Resources

Innovation and advancement are the key to success. Unless your business is adequately equipped with all the necessary financial, technical, human and intellectual resources, it cannot function, operate, innovate and succeed. Make the right investment decisions and acquire the necessary resources you need to grow while maintaining adequate cash flow.

Formalize Operational Systems and Procedures

Formalizing operational systems and procedures helps day-to-day activities run without a hitch. Have employees document best practices and keep these documents up to date.

Improve Communications

You need to improve communication within your business so that your employees and contractors know the goals and can work towards them. Likewise, ensuring external communication with your customers, bookkeeper, accountant and legal team helps keep your machine running smoothly.

Spend Time Strategically Planning

Strategic planning is the secret to expansion and growth. When everything is organized and running smoothly, you can allocate time to concentrate on strategic planning.

Concentrate on all the changes and innovations you need to pursue in order to make sure your business continues to flourish and expand. Then, create and document the plan so that you can work towards achieving them.

We’re here for you when you’re ready to expand. Our Build Your Bridge package can help you go beyond survival and into the Success Stage of the small business growth. Contact us today.

In my previous article, I shared the five stages of small business growth. One of the biggest decisions business owners face is whether to try to expand their businesses. Some business owners don’t want to grow. They want to maintain their clients and eventually pass them on to someone else as they head toward retirement. Others want to grow but haven’t learned what they need to know to progress. Both choices are ok; you just need to determine which direction you want to go in.

If you’re confident that you don’t want to grow, then start working on succession planning. Respect the clients that have given you their business for years by making sure you have the right people in place. Then create a plan to transfer the business and start working the plan.

On the other hand, if you want to expand your business, but feel stuck, it may be due to one of the following.

You Don’t Have a Solid Business Plan in Place

No business can succeed without a solid business plan in place, one that involves continually monitoring all the aspects of your business, ensuring that you’re prepared to deal with problems as they arise. An effective business plan will help you to concentrate on your vision and goals and establish firm plans in order to accomplish them.

Poor Cash Flow

As a startup, money is usually tight and it can take a year or two in some cases to generate a stable income. Even if you’ve been in business for years, you may need to consider whether or not your cash flow is working for you. It’s important to come up with and adhere to a realistic budget, and avoid draining the business income on unnecessary spending. Smart businesses also keep tight financial records and review their revenue and expense reports every month.

Ineffective Sales and Marketing Strategies

If you are ineffective with your sales and marketing efforts, you’ll throw money at the wind. You need to know your target audience, how to best market to them and how to close the deal. If you don’t have these very necessary skills, you’ll need to hire someone who does. This expert can focus all their time and energy on getting to know your competition, attracting potential clients and closing the deals.

If you feel you can’t afford to hire professionals, then start to learn sales and marketing skills yourself. It will take a lot of time and effort, but you’ll see better results.

Substandard Customer Service

Once you’ve attracted the attention of potential clients and converted them into customers, you need to do whatever it takes to retain them. Continue to monitor their wants and needs, make it easy for them to communicate with you, and make an effort to be pleasant and responsive.

Are You Suffering from Burn Out?

Owning a business demands a massive investment of money, time and energy. Let’s face it, it can be emotionally draining. All of the above leads to burnout. It’s important to take time, even if it’s mini-breaks throughout the day, to unwind. Whether it’s a brisk walk outside, reading a good book, dinner with the family or taking a short weekend “stay-cation,” the breaks will help you recharge and refocus.

If you’re unsure about what it takes to grow, start working with a coach or a mentor. He or she can help you identify resources and steps to take to get you to the next level. Schedule a free consultation today.

As you grow your business, it goes through a life cycle, of sorts, encountering different challenges in each stage that requires a unique approach. Marketing, sales, business development, and preserving market share are all different now than they were when you opened the doors. Your priorities and business operations have changed and so have your finances. Understanding the stages of small business growth will help prepare you to deal with the obstacles that most small businesses face as they continue to grow.

Existence

In the existence stage, businesses are typically small organizations in which the owners do most of the work and guides the actions of their employees. At this point, the company’s main concerns are getting clients and providing services or products that will earn their new client’s loyalty.

Survival

In the second stage of business growth, the company has managed to establish itself, has managed to generate a good client base and the quality products or services that those customers require. Revenues at this point aren’t capable of funding exponential growth, leaving survival as the major goal. Owners continue to be heavily involved in the day-to-day operations of the business.

Success

At this stage, the business has accomplished goals and stabilized cash flow making it possible for the owners to make the decision to either use their business as a means of support or as a base for further growth. The owners will be less involved in day-to-day operations as this stage.

Take off

At this stage, the business has grown considerably, has achieved a sustainable amount of financial resources and attracted key managerial talent. Primary concerns at this stage are not only to accelerate growth but also to learn how to generate enough revenue to handle that growth.

Resource Maturity

Businesses that arrive at this stage are generally preoccupied with consolidating and managing the financial gains that were brought on by the accelerated growth. To continue being successful, they also will need to focus on retaining the benefits associated with their small size. That is their ability to be agile, efficient and think out of the box.

Being Prepared

The five stages of growth must play a part in your business plan and the processes from stage one to stage five. If you plan for what needs to be done next and take immediate action, your business will have the best chances of achieving the next stage of growth.

If you don’t know what stage you’re currently in, take a look at your major risk factors. Are you just starting out or do you have a thriving machine that’s operating on all cylinders?

Once you know where you are, you can begin making plans for your next stage. You’ll also become more aware of your business, identify the problems, possible pitfalls, and opportunities at any given point. If you can do this, you’ll be able to navigate the five stages of business growth and thrive beyond your imagination.

If you’re struggling with any stage, I can help identify areas of improvement and scalability. Schedule a free consultation with me today.

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Cash flow is the lifeblood of any business and a fundamental factor when it comes to growth and longevity. Today, cash-strapped businesses are easily forced to the brink of failure with the difficult process of trying to get credit or a bank loans. It’s important that entrepreneurs understand from the get go that they can’t operate for long if their cash outflow is greater than cash inflow. All companies, especially startups, need to conscientiously monitor their cash flow to prevent disruption to the business.

Strategies for Operating a Cash-Strapped Business

A substantial percentage of cash flow challenges arise because business owners haven’t invested enough time estimating the potential revenue streams achievable and balance it against their obligation to pay out expenses. As a business owner, you should know the importance of calculating precise cash flow forecasts. If you don’t appropriately estimate your cash flow for the day, week, month and quarter, you’re going to be putting your company at risk.

From the first day you start your business, you need to track and manage your cash flow, including paying your employees, vendors and others against the time frame in which you collect payment from your clients. Make sure that you time cash inflow to arrive before payments to others are due. You should also set up cash reserves to smooth out the bumpy road.

Quality Product or Service is First!

You should always focus on the quality of your products and services before you decide to cut costs. Your business won’t survive if what you’re offering is fatally flawed. You may decide to outsource some of the work to keep employment expenses low.

Customer Service is Second!

Providing superior customer service will give any business a competitive edge. Sure, most consumers want to save as much money as possible on transactions, but they also expect a positive customer service experience.

Before you cut prices to match or beat the competition, focus on improving your customer service skills. When customers email, message or call, make sure that they receive real help instead of empty promises or excuses. If you have a designated customer service employee or department, ensure that they can quickly and efficiently respond to dissatisfied customers. If you cut employment costs by outsourcing this function make sure that you’ve picked a good agency and that you’re following employment law.

By having a well thought out customer service strategy in place, you’ll give your clients a reason to continue doing business with you, regardless of whether your prices are somewhat more expensive than your competitors. Mistakes are going to happen, but if you have effective customer service strategies along with a great product or services in place, most consumers will be more likely to overlook the occasional mistake.

When it comes to business success, cash is always king and cash flow should always be priority #1. Let’s work together to come up with a strategy for your business. Call me today to discuss.

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It’s important for businesses to understand cash flow. Cash is what keeps a business operating smoothly. You obviously need profit, but equally as critical is your cash flow. You must have a firm understanding all the financial facets of your business, from net income to cash flow from operating activities. Here are the basics.

What is Net Income?

Net income is the mathematical outcome of gains and revenues, minus the cost of products and solutions sold as well as losses and expenses. Net income appears on your income statement as a net gain. If the net amount is negative, it is referred to as a net loss.

What is Cash Flow from Operating Activities?

Cash from operating activities is net cash inflow documented in the first section of cash flow statements. Cash from operating activities is focused on the outflows and inflows from primary activities such as providing services, buying and selling merchandise, etc.

Cash from operating activities doesn’t include the amount of money spent on capital expenditures such as new facilities or equipment, cash garnered from the sale of long-term assets or cash utilized for other long-term investments. `

Here’s How They’re Different

Net income and cash flow from operating activities are different for many reasons.

Reason #1: Cash flows from operating activities include specific items that are addressed distinctly on the income statement. Non-cash expenses, including depreciation, share-based compensation and amortization need to be included in order to calculate net profit. These types of expenses are incorporated back into net income on the associated cash flow statement. They reduce net income but do not affect net cash flows.

Reason #2: Net income is a line item found in the operating activities area of the cash flow statement. Cash flow from operating activities includes the sum of net income, changes in working capital and changes for non-cash expenses. Increases of existing assets, including accounts receivables, inventories, and deferred revenue are viewed as uses of cash. Reductions in these types of assets are considered sources of cash. In the same manner, decreases in current financial obligations, including accrued expenses, accounts payable and tax liabilities are considered are considered uses of cash.

Reason #3: Another reason they are different has to do with timing. Differences exist between the recognition of revenue and expense and the various underlying cash flows.

Once you understand the difference between net income and cash flow from operating activities, you’ll be on your way to fully comprehending the health of your business. But, what happens when your business is cash strapped? I’ll share strategies in my next post so stay tuned.